USD/JPY cracks the 110.00 figure level but doesn't break out
The 110.00 level is more psychological than anything else but is a key area of contention for buyers and sellers. Right now, buyers are testing waters above it but isn't running away with a move to the upside just yet.
What gives?
Although the 110.00 figure level is breached, buyers still need to break above the 200-day MA (blue line) @ 110.21 in order to extend the upside move.
The yen has been relatively weak as US yields have posted some recovery following the woes in Italy at the end of May - along with improved risk sentiment in the market. And that could be enough of a platform for buyers to build on in a move back to the upside.
Downside risk for the pair is if it falls back under the 50.0 retracement level @ 109.65 into a daily close. But key levels to watch on a move down will be the 100 and 200-hour MAs at 109.50 and 109.29. Move back below those two levels and near-term bias turns bearish again. That will open up a move back towards a test of the 100-day MA (red line).
